Government, Hobby Lobby Disagree on Scope Of Injunction Following Supreme Court Ruling

By Mary Anne Pazanowski

Oct. 28 — The Obama administration and Hobby Lobby Stores Inc. Oct. 24 filed a joint status report in which they disagreed about the scope of a permanent injunction against the government's enforcement of the Affordable Care Act's contraceptive coverage provisions.

Hobby Lobby, joined by sister corporation Mardel Inc., argued that the injunction should preclude any enforcement of the statute, without regard for any future regulations adopted by the government in an attempt to accommodate the for-profit corporations' objection to providing no-cost insurance coverage to its employees for contraceptive drugs, devices and related services.

The government, by contrast, asked the U.S. District Court for the Western District of Oklahoma to order that the injunction wouldn't apply to any change in a statute or regulation, such that the corporations' failure to abide by any new regulation intended to accommodate their views would be actionable. The government added that nothing in the injunction would prevent the companies from filing a new lawsuit challenging any future regulations.

Both parties agreed that the corporations won in the Supreme Court (Burwell v. Hobby Lobby Stores, Inc., 2014 BL 180313 (U.S. June, 30, 2014) and were entitled to a permanent injunction. The high court held that the so-called contraceptive mandate constituted a substantial burden on the corporations' exercise of religion in violation of the Religious Freedom Restoration Act (RFRA), 42 U.S.C. § 2000bb.

‘Express No Advance Views.'

The Hobby Lobby plaintiffs argued that the “most straightforward way” to prevent the government from enforcing the ACA provisions against them would be to “enjoin the statute and regulatory guidelines” and “to express no advance views on any future regulatory accommodation that the government may devise.” In other words, the court shouldn't enable the government to hold the corporations to any regulation it may issue in the future.

If the government modifies the regulations in a manner intended to accommodate for-profit corporations, then the corporations “could face the prospect that, any day, the government could issue slightly different rules and immediately dissolve the injunction and strip Plaintiffs of the protection they won at the Supreme Court,” the corporations said.

“Allowing injunction relief to be automatically dissolved by the issuance” of new rules “would be both unfair and inefficient,” they said.

Preemptive Injunction ‘Inappropriate.'

The government asked the court to enter an injunction that isn't as “overly broad and ambiguous in scope” as that requested by the corporations. It would be “inappropriate,” the government said, for the court to “effectively, preemptively enjoin application of any forthcoming regulations at this time.”

The government said that the Supreme Court's decision turned, in part, on the existence of opt-out provisions for nonprofit religious corporations. The high court found that this accommodation proved that there may be “a less restrictive means of furthering the government's compelling interests” in women's health and workplace equality.

“Accordingly,” the government proposed an injunction that doesn't “prevent defendants from enforcing the contraceptive coverage requirement ‘if religious accommodations … are made available to for-profit entities' and plaintiffs do not either avail themselves of those accommodations or provide contraceptive coverage.”

The government's proposed injunction, it said, makes “clear that while the injunction precludes the enforcement of existing law, it would not preclude enforcement of any future, substantively different regulations.”

Mark Rienzi and Lori Halstead Windham, of the Becket Fund for Religious Liberty Washington, and Charles E. Geister III and Derek B. Ensminger, of Hartzog, Conger, Cason & Neville, Oklahoma City, represented corporations. Joyce R. Branda, Sanford Coats, Jennifer Ricketts, Sheila M. Lieber and Michelle R. Bennett, of the U.S. Department of Justice, Washington, represented the government.

To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bna.com

To contact the editor responsible for this story: Fabia Mahoney at fmahoney@bna.com